MAINLAND COMPANY SETUP MADE SIMPLE: NAVIGATING THE RULES AND PROCESSES IN THE UAE

Name: Creation Business Consultants
Address: Office 2102, Cheddar Cheese Tower, O-14 Tower, Marasi Dr, Business Bay, Dubai, Dubai, 00000, United Arab Emirates
Telephone: +971 4 878 6240
Price range: $$$$

This article was updated on April 15th, 2024

This article has been researched and written by Dastan Nurmanbetov and the team at Creation Business Consultants and has not used AI in generating this article.

So, you are looking to expand your business and open a mainland company in Dubai. Creation Business Consultants team of expert consultants can help you to form a company in Dubai and in the UAE, while making sure that you maintain control of your company.

Along with the company setup, we assist with:

Security documents that ensure 100% profits.
Have full control of your company whereby you will make all operational and business decisions while having all the company voting rights.

We have helped many business owners from the UK, USA, Europe, Australia, Asia, and many other countries to successfully set up their companies in Dubai and the UAE, fulfilling all their needs specific to their business requirements. Set out below are some of the main dos and don’ts that a mainland company should follow.

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COMMERCIAL COMPANIES LAW 2021 PERMITS THE INCORPORATION OF THE FOLLOWING TYPES OF MAINLAND COMPANIES IN THE UAE:

Joint Liability Company – General Partnership Company
Simple Limited Liability Partnership Company
Limited Liability Company (LLC)
Public Joint Stock Company
Private Joint Stock Company

The Commercial Companies Law 2021 provides that if a company does not adopt any of the above-mentioned forms, it will be null and void. Therefore, it is vital that you seek the correct advice when setting up a Dubai company.

In addition to the above structures, foreign companies or entities registered in free zones can also set up a Dubai branch or a representative office within mainland UAE. However, the business activities of the branch must be identical to the business activities of the parent company.

THE IMPORTANT DOS

As per the aforementioned provisions, the following are some of the requirements for investors setting up business in Dubai mainland:

Discuss and negotiate the terms of the shareholder agreement.
The foreign shareholder must enter the UAE at least once at the time of the initial approval.
Ensure the company meets the minimum number of shareholders and directors.
The company’s total number of shareholders, directors or manager does not exceed the limit.
Any changes in the shareholding, the MoA, and other company documents will require formal amendments.

The following are some of the main benefits of an onshore / mainland company:

No restrictions on doing the business throughout the UAE and globally.
No foreign exchange control, quotas, or trade barriers.
Low import duty.
No stipulation for yearly audits.
A wide range of license type and activities.
No personal tax.
100% repatriation of capital and profits.
No limitation in obtaining employee visas.
Ability to get affordable space with flexible rent or lease for office anywhere in the UAE.

THE IMPORTANT DON’TS

Companies that are set up in mainland Dubai should be aware that:

The law does not permit the use of certain words within the trade name of a company. The company name should not include the name of a country, government, or religious words etc.
A company that is registered by the DED is only permitted to perform those activities which are stated in the company trade license. Any other additional activities outside of the scope where the business wishes to perform should not be undertaken without prior permission.
A branch of a foreign company should not undertake any trading activities. The branch must operate as per the parent company business activities.
A representative office can not undertake any trading activity. Representative offices are meant only to act as a marketing arm of the parent company.
A company that is established in mainland UAE is governed by the UAE Commercial Companies Laws and therefore should not undertake any action against the public policy or morality of the state.

To conclude, setting up a company in mainland Dubai can be lucrative for business owners that want to target the UAE market for selling their products and services. Most importantly, for those that are starting a company in mainland Dubai or Abu Dhabi, the UAE Commercial Companies Law does not prescribe a minimum share capital.

Creation Business Consultants helps clients assess suitable business activities and prepare licence applications based on their intended operations. The relevant authority determines which activities are approved and included on the trade licence. Contact our corporate structuring team to discuss company formation in the UAE or Saudi Arabia at [email protected], or +971 4 878 6240.